Supply Chain Vulnerabilities Threaten Industrial IoT Security

Industrial IoT (IIoT) firms depend on a reliable supply chain to source raw materials and components that keep production lines humming. While these primary supply chains are closely monitored, a second, often overlooked chain delivers the very hardware that powers IIoT infrastructure. Because of limited transparency, the origins of internal components within IIoT devices are hard to track, and many arrive with exploitable security flaws.

With a single IIoT device often assembled from dozens of global suppliers, the risk of embedded vulnerabilities multiplies. Finite State’s 2019 Finite State Supply Chain Assessment report notes that components pass through multiple layers of suppliers and integrators before being integrated onto a board, tested, and shipped by the OEM.

Real and Many Risks to IIoT Infrastructures

Network operators recognize supply‑chain risks, but pinpointing specific vulnerabilities is challenging. IIoT deployments often extend beyond a manufacturer’s walls to shippers, merchants, and partners. As the network grows, the chance that malicious code propagates—and that seemingly benign firmware exposes open ports—increases.

Matt Wyckhouse, CEO of Finite State, observes that many embedded systems contain hidden vulnerabilities that asset owners are unaware of. A breach can become a foothold for attackers to infiltrate corporate systems, compromising industrial control systems (ICS), production processes, and critical corporate data. The problem is amplified when firmware updates are delayed or never applied.

ARC Advisory Group’s July 2019 The State of Industrial Cybersecurity survey found that 26% of respondents considered third‑party threats, such as supply‑chain or partner risks, a major concern, while 44% viewed them as a minor concern. Notably, ransomware (70%) and targeted attacks (68%) could be launched via a supply‑chain breach.

In the same survey, 28% of respondents felt it was “very likely” or “quite likely” that their company’s ICS would be targeted. The Irdeto 2019 Global Connected Industries Cybersecurity Survey revealed that only 17% of IoT devices used by large enterprises remained attack‑free in the past year.

For more on IoT security, register for our IoT Security Summit this December.

How IIoT Supply Chains Are Compromised

Unlike conventional supply‑chain disruptions that halt production, IIoT breaches are covert, often unfolding over weeks or months. Attackers typically compromise tier‑2 industrial IoT suppliers, infiltrate their websites, and replace legitimate firmware with Trojanized versions. Network administrators may unknowingly download and deploy this malicious firmware, giving attackers a foothold inside the plant’s firewalls.

Once inside, attackers can spread from industrial networks to corporate data networks, creating a multiplier effect. Older devices—sensors and components that have been in place for a decade or more—pose higher risks due to outdated support and patching. Finite State’s research cited a Huawei component that used a 2003 OpenSSL version, a well‑documented vulnerability.

Backdoors—whether intentional debug ports or hidden API access points—can also serve as entry routes for malicious actors. In many cases, manufacturers leave these ports open to aid support, inadvertently providing attackers with an easy way in. Some countries may even export products with intentional backdoors to steal intellectual property.

Research from New York University’s Tandon School of Engineering highlights that IoT remains largely unregulated in terms of security standards. Device owners have little control over upstream supply chains, and many suppliers fail to disclose their cybersecurity practices.

Malicious Actors’ Objectives

Attacks often aim for ransomware, which can halt production until a ransom is paid. Disruptions to production lines—through altered sensor data or unsafe machine settings—can lead to defective products and safety hazards. A March 2020 OT Security Best Practices report warned that such breaches threaten human safety, the environment, and national economies.

High‑profile sectors—energy, power grids, oil and gas, and increasingly healthcare amid the pandemic—are prime targets. Finite State’s Wyckhouse notes rising ransomware attacks on hospitals, while Adolus’s Byres identifies the medical sector as a new target‑rich environment.

Beyond financial motives, attackers may seek intellectual property or use the supply chain as an initial foothold to infiltrate corporate networks.

Mitigating IIoT Supply Chain Weaknesses

Effective defense begins with a comprehensive inventory of all IIoT devices. Follow this with a supply‑chain risk assessment that identifies macro risks—such as ransomware and data theft—and evaluates each device’s specific vulnerabilities.

Consider isolating IIoT traffic via air‑gapping to separate OT from IT networks. Evaluate suppliers at the point of purchase; the vendor’s security posture is most assessable during procurement. For high‑volume purchases, establish a formal vetting process to ensure consistent security standards.

Demand more than a security statement—request detailed security reports or third‑party assessments. Leverage public resources like the National Institute of Standards and Technology (NIST) National Vulnerability Database to cross‑reference Common Vulnerabilities and Exposures (CVEs).

Emerging services address these challenges. Adolus, born from a U.S. Department of Homeland Security initiative, offers a database that tracks device lineage, component origins, and known vulnerabilities. Finite State provides firmware analysis tools that detect hidden risks and reassess risk profiles after updates.